ServiceNow's unexpected expense surge makes its rich valuation more vulnerable in a struggling software sector. Revenue rose 21%, but spending drove an EPS miss and one quarter of guided cRPO deceleration; wider market conditions could hurt near term. The 20% selloff looks excessive, and few software companies should benefit as much from AI. Management could deliver over 3-5 years, though the stock is only close to a buy again now; below $100 looks good for the long term. x.com  x.com  x.com  x.com 

ServiceNow's third-quarter subscription revenue, cRPO and operating-margin beats make its double-digit selloff look overdone. After a 77% rise from April lows, it needed a big beat and raise; lower fourth-quarter cRPO guidance and back-loaded implications for $30-$32 billion in subscription growth by 2030 leave the stock in show-me mode. x.com 

Elastic risks being a jack of all trades and master of none, fighting a multi-front war in search, observability and security in the AI age. AI search competition is ferocious from Pinecone, Weaviate, Atlas Vector, pgvector and Turbopuffer, ClickHouse competes on machine data, and Braintrust leads LLM observability. The bull case is that search is the most AI-relevant primitive and a quarter of Elastic's $100k+ customers run AI use cases, but its AI revenue is indirect, with no hero product. … Show more

ServiceNow's costs are rising far faster than revenue without the RPO acceleration management promised. Q3 revenue rose 21%, while total cost of revenue climbed 56% and net income fell 45%; stock compensation appears to be using about half of free cash flow. The selloff looks deserved, though the shares are now closer to fair value. Sustainable margins and measurable returns remain the test. x.com  x.com  x.com  x.com  x.com  x.com 

Elastic looks cheap against its sales, trading at 5x sales and 4x next year's when software companies usually get 5x. Fair value is $103.24-$131.39, about 5x next year's sales give or take 12%, so at $86.68 it trades 16% below where fair value starts. This is a levels-only view based on reported earnings and revenue estimates, with no fundamental work. x.com 

ServiceNow has room for valuation expansion. Based on the historical link between its revenue growth and EV/Sales, 11.9x NTM sales is fair for a 20% three-year revenue CAGR, implying $205 a share, 44% above $142.35. Q2 subscription revenue rose 23% in constant currency to $3.9B, beating the top of guidance, and AI contract value crossed $1B. The offset: GAAP operating income fell from $358M to $162M and gross margin slipped on hyperscaler and frontier-model costs. x.com  x.com  x.com  x.com  x.com  … Show more

ServiceNow's price bakes in something extreme: a reverse DCF implies only about 6% annual FCF growth for a decade. That needs LLM platforms to disintermediate it, a ~$12B M&A spree to sink per-share value, and AI to fail to lift margins. Yet subscription revenue grows ~20% cc, the Now Assist target rose 50% to $1.5B, half of net new business is non-seat-based, and cross-sell is firing. Bears have fair points: ~275bps organic cRPO deceleration, Armis at ~26x sales, and SBC near 15% of revenue. … Show more

ServiceNow looks very reasonably valued at around 20x forward earnings while growing about 20%, near one of its lowest multiples in years even as execution stays exceptionally strong. Revenue grew about 24%, earnings beat and guidance rose modestly, extending a run of consistent compounding few enterprise software businesses can match. A lower multiple often reflects falling expectations while the economics keep improving, not a problem with the business. x.com 

Salesforce looks compelling as smart money appears to be accumulating it amid AI-disruption fears. Its last three-month candle had the largest dollar volume ever, coming off a sweep of last quarter's lows on record buy volume, suggesting retail is capitulating while institutions buy. CEO Marc Benioff's $50B buyback shows confidence, though the narrative still needs to flip at earnings and a deep market pullback could drag it lower. x.com  x.com  x.com  x.com  x.com  x.com  x.com  x.com  x.com  x.com  … Show more

Braze is an AI winner the market is pricing like a loser: organic growth is accelerating, yet it trades at about 2.5 times forward sales. Revenue grew 24% year over year, another quarter of acceleration, with net retention up, bookings up 50%, and AI products generally available ahead of schedule. The bar for a public SaaS company to count as an AI winner is very high right now, but Braze is delivering the revenue acceleration the market says it wants. x.com  x.com